Chinese SMEs' sourcing practices and their impact on western suppliers

Abstract

Whereas many countries are still suffering from the aftermath of the financial crisis, China's continuous economic growth offers an opportunity for Western companies to reach their growth targets. More and more, Western companies are starting to see Chinese companies not only as sourcing partners but also as potential customers (B2B). While internationally operating Chinese companies are used to purchasing goods from Western companies, for Chinese SMEs this process constitutes a huge challenge. By addressing buyer-supplier relationships from the point of view of Chinese SMEs as buyers, this paper approaches an often neglected topic. Based on an interview series conducted with representatives from Chinese companies, this paper discusses the sourcing behavior of Chinese SMEs and the change of supply base over time. The paper offers valuable insights for Western suppliers and Chinese buyers on how to build and improve their relationship and on how to strengthen their competitive position. © IFIP International Federation for Information Processing 2013.